The International Pulse/The Great Ruble Scam
Sterling, Claire
THE INTERNATIONAL PULSE The Great Ruble Scam by Claire Sterling Why would anyone in the West want to hold Soviet rubles? The question has puzzled police in half a dozen countries for more than a...
...The question has puzzled police in half a dozen countries for more than a year, as they've stumbled separately upon black market swaps of rubles for dollars in staggering quantities...
...He was also supposed to "invest and reinvest" his newly acquired rubles in the Russian economy...
...While some of their deals fell through, there is ample evidence that hundreds of billions of rubles were up for sale in Europe and the U.S...
...Upon learning all this, the commission ruled that Deputy Prime Minister Filshin should be relieved of his duties for "incompetence, negligence, insincerity, abuse of powers and deception of the Parliamentary Commission...
...The goal wasn't necessarily personal gain: it was government policy...
...Claire Sterling is the author of The Terror Network and Octopus...
...CI 36 The American Spectator June 1992...
...In exchange for the black-market dollars, Russia's government undertook to "allow foreign businessmen to buy and export, without duty, a strictly limited range of raw and other materials, waste products for recycling, products made of precious materials, etc...
...The first signs of the illegal dollarfor-ruble swaps appeared in the winter of 1990-91...
...It was during the winter of 1990-91 that billion-dollar lots were offered to American investors...
...The American Spectator June 1992 35 The last straw was the discovery that Gibbons was a professional con-man, wanted by Interpol on a British warrant...
...They were offered to foreign investors either in bank-to-bank credit transfers or with certificates of reentry and permission to open Russian bank accounts: the parliamentary commission and all Western police accounts agree on this...
...Understandably, "The Case of the 140 Billion" caused an uproar in Moscow...
...Among the documents before the commission was a protocol of intent, signedby Russia's then–prime minister Ivan Silayev, endorsing a 300-billion ruble deal with "Mr...
...In two reports, dated February 15 and March 1, 1991, it provided startling details: Beginning in the summer of 1990, three different Western "businessmen" approached the Russian government with offers to buy 140 billion rubles or more for $7.8 billion and up (a super-favorable rate of 18 to 1...
...His guarantor was Russia's deputy prime minister, Gennady Filshin...
...Seeing what they thought was a shortcut to salvation, they took it...
...This was demonstrably why international criminals were so interested in rubles...
...Since then, a special parliamentary commission of the Russian Federation has documented government-backed transactions involving as many as half a trillion rubles...
...the trainload of rubles passed through Poland...
...The contract, blocked at the last moment, involved a government-sponsored exchangeof 140 billion rubles on the black market...
...Ross" before his exposure...
...Plainly, Russia's democratic leaders, emerging from the Communist dark ages, were sadly unaware of the sharks circling in the outside world, and knew little of acceptable financial practices in the West...
...With serious Western businessmen holding back, foreign speculators were teaming up with members of an estimated 3,500 domestic "Red Mafia" groups to fill the breach...
...In fact, there were no such clauses in the contract, nor did Gibbons promise anything of the kind...
...Under these conditions, the rubles could be used to buy whatever is for sale in the former Soviet Union, whose natural resources—the richest in the world—can be had for giveaway prices...
...Though Pavlov's order virtually wiped out popular savings, he maintained that it was really meant to stem an uncontrollable flow of rubles to the West, and "a river of dirty money" coming back...
...Filshin had given his blessings to an arrangement whereby Gibbons was to put $7.8 billion in a Swiss bank, while 140 billion rubles would be deposited to his name in a Russian bank...
...Billion-dollar ruble lots were offered to American investors...
...That and similar deals for black market dollars had been approved by all his superiors—including Boris Yeltsin, the commission noted...
...Mafia-type groups [are committing] large-scale unlawful transactions with foreign partners," he wrote...
...I just couldn't believe that anybody in his right mind would swap narcodollars for rubles that nobody can spend," he said...
...The seller was notorious Turkish heroin trafficker Hamza Turkuresin, closely associated with Calabria's criminal 'Ndrangheta, and with a group known to belaundering cocainemoney for Colombia's Medellin cartel...
...A trainload of rubles passed through Poland in transit for Belgium...
...And dirty money was undoubtedly flowing in...
...The parliamentary commission, politically on the Russian government's side, must have flinched at what it found...
...Sveridov, a regional deputy from Chelyabinsk in the Urals, signing for an improbable and penniless "Ekho Manufacturing Ecological Company...
...and a Swiss undercover agent in Bellinzona actually bought a sample 100,000 rubles from someone claiming to have a container full...
...Western diplomats dismissed the charge as "bilge"—Britain's foreign minister called it "manifestly dotty"—but Pavlov was wrong only about the plot, not about the money...
...Predictably, the Communist premier accused Western banks of an imperialist plot to dethrone President Mikhail Gorbachev and destabilize the Soviet economy...
...On these singular terms, the deputy prime minister directed Russia's ministry of trade to "render assistance and support for the contract," and instructed the Moscow inter-regional commercial bank to open the necessary ruble account (#713713...
...The prevailing economic, political, and judicial confusion...
...There followed a Colin Gibbons of Britain, who had the signatures, the government sanction, and the authorized Russian bank account on a 140-billionruble contract when he was stopped...
...the rapid expansion, of organized crime in Leonid Brezhnev's day—all these factors have made Russia a magnet for the international underworld...
...Filshin, who went on to become Russia's minister of foreign trade, still insists that the Gibbons deal was "a version of the Marshall Plan...
...Testifying before the commission, Filshin claimed that Gibbons was going to spend the dollars to "saturate the Russian market" with 700,000 tons of meat, 300,000 tons of butter, and other "top-quality" Western goods...
...seizures at the border were up 200 percent, reported the head of Soviet customs...
...The signatory on the Russian side was A.A...
...Titanium is being reworked and exported as "waste...
...The Russian federation alone had tried to swap a good half trillion rubles for dollars in various black market deals, the parliamentary commission found...
...T hese rubles could be spent, however...
...High quality materials, precious metals and alloys are being bought up for export "at scrap metal" prices...
...A Swiss undercover agent was offered a whole shipping container stuffed with rubles...
...In a confidential report to Interpol in April of last year, the head of the Soviet interior ministry's organized crime department, Gennady Chebetarev, described how Russia and the other Soviet republics were already being looted in just this way...
...T he idea that Russia's highest leaders could have worked such a scam seemed so incredible that many thought the KGB must have framed them...
...The fact that such information is now coming to light may help Russia's democratic leaders cope with this mounting threat to its economic sovereignty...
...Their true design was actually written into the protocol of intent signed by Russia's former prime minister Silayev with "John Ross," the Ukrainian ex-con...
...In Geneva that December, Judge Jean-Pierre Trembley ordered the arrest of a Colombian, a German, and three Argentines representing the same money-launderers...
...According to Interpol, at least 40 percent of the USSR's new joint ventures were set up with funds "of dubious origin...
...The evidence, still incomplete, points to the criminal penetration of the former Soviet Union by drug cartels and money launderers...
...Even though the ruble was sliding fast in the collapsing Soviet economy, police phone taps in Italy revealed a ring of professional money-launderers discussing multi-billion ruble deals...
...Suspicions grew when hardliner Valentin Pavlov, premier of the still-existing Soviet Union, ordered the recall of all 50- and 100-ruble notes, putting the blame on Boris Yeltsin's government for its Gibbons deal...
...They had been trying to broker a swap of 70 billion rubles for $4.6 billion...
...It was because of a single colossal transaction that the commission was set up in January 1991...
...Trembley was unable to locate the rubles, reportedly left in a container with Brink's in Holland, and he finally released the suspects...
...Rubles were certainly pouring out of the Soviet Union from every side in 1991...
...At the time, 140 billion rubles amounted to $84 billion at the official exchange rate (1.6:1) and $9.3 billion at the top black-market rate (15:1...
...A ton of petroleum, for instance, can today be bought for $25 in black market rubles and sold for $160 in Europe...
...the instability discouraging serious Western investment...
...the Italian police intercepted phone calls in Verona and Rimini involving multi-billion ruble deals (for which Judge Roberto Sapio ordered fourteen arrests...
...Next came a Leo Vanta who, when asked for credentials, proffered an autographed picture of President Reagan...
...He was simply interested in the currency...
...while the Ross-Vanta-Gibbons talks went on in Moscow...
...Large suspect ruble transactions were reported by Belgian, German, and Netherlands police...
...The first to come along, in August 1990, was a "John Ross" of New York, who proved to be Jan Semyonovich Zubok of Ukraine, twice jailed there for theft before moving to the United States...
...Both accounts would be under Gibbons's control...
...He told the investigators only that a client had asked him "to buy a great sum of Soviet rubles...
Vol. 25 • June 1992 • No. 6
